Ciena Corp. continued its financial free fall, posting another quarter of losses last week. "We're seeing our customers go to extreme measures to preserve cash," president and CEO Gary Smith says. For its second quarter, ended April 30, the optical transmission and switching equipment maker lost $612.2 million on revenue of $87.1 million, down from a $50.7 million loss on $425.4 million for the same quarter a year ago.

With the telecom industry in a severe downturn and no relief in sight, Smith predicts that Ciena's third quarter will be no better than its second. Its results "are indicative of a really bad market rather than the company's performance," says Ron Kline, an analyst at research firm RHK. It's been hit particularly hard, he says, by the drop-off in long-haul service providers' spending.